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Mon September 12, 2011
Modern day gold rush has many companies prospecting for deals
With the economy seemingly in a freefall, a frenzy of gold buying as sent the price to record highs.
This gold fever has created a new breed of gold miners – traveling estate buyers who temporarily set up shop in hotels, offering to pay cash on the spot.
Brian Bartholomew, 36, is one such buyer. He's set up a temporary office at the Hyatt Hotel in Bellevue for three days. He sits at the head of a 20-foot-long conference table, like some sort of chairman of the board.
His goal? To buy gold. As much of it as possible. And to do that he's got a kit that includes gold testers, diamond testers, a scale and an assortment of watch and coin collector books.
Just an hour into his first day, Bartholomew had picked up a random/questionable collection of "valuables." A 14 karat gold cluster ring, which he said he paid a little extra for because it can be resold instead of just melted down for its gold content.
He also bought a gold ring with a cubic zirconia that could easily pass for the real thing to the untrained eye. And, a couple of gold tooth fillings.
When asked what kind of person brings in gold teeth, Bartholomew said it's fairly common.
"These days because gold being so high, once they get their fillings out, the patients ask for their fillings back. I’ll give you an example, these two little pieces of teeth are worth $145. Gold is down today but it was at $1900 a couple days ago. It’s a just a remarkable market right now."
It’s so remarkable that he’s one of seven teams sent out by Blackthorn Estate Buyers in Boca Raton, Fla. He and his colleagues are out on the road three weeks of every month. And even on a slow day like today, Bartholomew says there’s enough money in it to justify the expense of flying from city to city, renting an expensive conference room and taking out full page ads in local papers.
Blackthorn is just one of thousands of companies trying to cash in on soaring gold prices, said Susan Schutz a spokesperson for the Better Business Bureau of Western Washington. She's definitely seen a rise in these types of gold buyers. Schutz said:
"With the economy the way it's going," Schutz said, "everyone is looking for ways to unload and make money and gold buying and other estate buying has become very popular. So, right now people are just questioning the traveling companies that are popping up seemingly everywhere. And when something gets popular like gold buying, you’re going to get a lot of possibly shady businesses showing up."
Schutz cautions sellers to do their homework. Estate buyers often tout themselves as experts but there is no required certification or licensing.
As for those companies that have you mail in your gold, several of them, including the most famous, Cash 4 Gold, have racked up a high number of complaints with the bureau. Allegations of discrepancies in price offers, hidden fees or claims for lost or damaged shipments are the most common.
That’s not to say everyone is out to get you said Schutz. Blackthorn, for instance, has an A-minus rating with the bureau.
Do the homework
Back at the Hyatt, Bartholomew says he prefers to deal with people who’ve done their research. Even if it means striking out. He said:
"I had a Rolex watch that came in that we couldn’t do a deal on. A woman’s 18k gold President. It sells, you can look it up on eBay, it sells between $23 to $2500 I offered her $2100 and she wasn’t interested in selling it."
But eBay isn’t Bartholomew’s only competition. Besides online auctions there are local jewelry stores and pawn shop dealers. They're so aggressive, he said, that the last time he was in Bellevue people stood outside the hotel waving their own "We Buy Gold" signs, trying to lure away his potential customers.
It's true the market is flooded with buyers vying for your precious metals. And the barrage of commercials and ads – with their urgent SELL NOW messages, are adding to the speculation frenzy.
But it’s worth noting the volatility of the gold market in recent weeks. While we’re still in the midst of a four-year high, the price of gold has been fluctuating from $50 to $100 dollars a day.
So before panning for gold in your jewelry box, make sure to check the day’s gold prices. If it’s a little spending money you’re after, it could mean the difference between a happy meal and a nice bottle of wine.